FTC Sinks Fangs Into Firm Accused Of Incessantly Tracking Mobile Shoppers

The FTC has just laid the smackdown on yet another company that's been found guilty of exploiting mobile users without their knowledge. The FTC found that the company, called Nomi Technologies, even went against its own privacy policy mere months after it promised not to, in late 2012.

Nomi's business model involves working with retail outlets to install sensors in their stores. As a customer walks in, these sensors fetch a phone's MAC address, which is broadcast broadcast via Wi-Fi, and begin to track it. You can see where this is going. With information in-hand, Nomi is able to tell these retailers about a couple of different things: how long the customer stayed in the store, and how often they visit. I would not be surprised of the retails gained information on other stores the customer went to.

Nomi Tracking

If there's a fortunate part of all this, it's that customers don't seem to have been tracked on that personal of a level. Nomi and these retailers didn't know who these customers were; they only knew their smartphone (and it's not clear if retailers are able to detect whether or not a previous customer has reentered the store as it happens). Still, despite all that, this is a gross privacy violation, and one that the FTC apparently won't put up with.

The biggest flaw with Nomi's operation is that its opt-out methods were useless. If someone doesn't even realize they're being tracked, how are they going to know about an opt-out mechanism? While this tracking system was in place, Nomi had data on over 9 million phones.

Going forward, Nomi has said that it will begin abiding by its own privacy policy, but I am not entirely sure how it's going to go about its business when it profits most on unsuspecting users.